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Murthy on how to counter outsourcing threats

Last updated on: October 26, 2010 15:48 IST

Murthy on how to counter outsourcing threats

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India will have to recruit local people at the front end of its operations to mitigate the discomfort and outsourcing fears, Infosys mentor N R Narayana Murthy said in Bengaluru on Tuesday.

"We have to make sure we are not very visible in those markets", he said when asked about a possible solution over IT outsourcing concerns faced by Indian companies.

He said there was 'bound to be discomfort by any government' if a large percentage of the workforce was of Indian origin. He cited the example of the Indian government's discomfort when China sent people to erect power plants in India.

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Image: N R Narayana Murthy.
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"The solution for us is to make the front end local, then no one will raise any objection", he said citing the example of China.

"Why isn't there uproar against China", he countered, "China exports $1.1 trillion. Ours is a piddling $50 billion. Ours is nothing compared to China."

He said the damage done to lower level employment opportunities in the West was because of China's extraordinary performance in exports, but nobody was talking about it because they were not visible.

"The moral of the story is to make sure we are not very visible in those markets," he said.

"Hire local talent. Hire Englishmen in England, hire Americans in US and the Brazilian in Brazil", he said.

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Murthy was addressing a seminar of the All India Management Association titled 'knowledge summit: India -- knowledge and professional services to the world -- the next decade.

Murthy said that as per estimates, IT industry had the potential of growing to $300bn industry from the current $50.

The incremental opportunities for the industry would be in areas like public sector and governance, genomics, cloud computing and digital economy.

However, all this would throw up the challenge of procuring the required talent in the right numbers.

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Image: N R Narayana Murthy.
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He said India would need 6-7 million professionals.

"To get seven million people is not going to be easy", given the fact that India is one of the fastest growing economies that would require engineers to develop roads, power and other infrastructure, he said.

Scaling up the number of engineering intake in the country is the key to ensure that there are sufficient people to add value to the industry.

"This would have to come from reforms in the education sector and creating brand equities for companies in India", he said, adding that Indian companies would have build credibility in the global market to attract talent.

"Unless we create brand equity it will not happen", he said.

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Image: A BPO professional.
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Apart from traditional sectors like application development and package implementation that contribute towards major chunk of revenues, infrastructure management services, product life cycle, retail and health care are other areas with growing opportunities, he said.

Going forward, there would also be a need to leverage expertise of professional experts like doctors and lawyers, he opined.

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Image: A BPO.

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To a question on if the IT Industry was continuing to get the talent cream, he said the principles of free market worked anywhere and youngsters were bound to go where the returns are higher.

On the rural BPO sector, he said, "Rural BPOs will play an important role in employment", given the fact that rural customers need communication in local languages by those who understand them.

"This will be important with most corporations looking at the bottom of the pyramid." The opportunities of rural BPOs also were more given e-governance, including access to land records and motor licensing.


Image: N R Narayana Murthy.

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